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on Transition Economics |
| By: | Bradley Jones (Reserve Bank of Australia); Joel Bowman (Reserve Bank of Australia) |
| Abstract: | China's monetary policy framework has evolved considerably over the years. However, official descriptions provide limited detail and it generally remains less well understood than befits the world's second largest economy. This paper takes stock of the evolution of monetary policy in China and, by placing these developments in international context, also contributes to the emerging discussion about whether aspects of monetary policy in China are beginning to converge on advanced economy norms. Our main takeaways are as follows. First, on the institutional set-up, we note that the absence of instrument independence and the nature of accountability mechanisms remain substantial points of difference, reflecting China's single-party state system in which the levers of macroeconomic management remain highly coordinated under the State Council. Second, the objectives for monetary policy in China and how they find practical expression in the operational framework continue to have few parallels in advanced economies, although some implementation features (such as the corridor for policy rates) are more familiar as China continues to transition from a quantity- to price-based monetary system. Third, elements of The People's Bank of China's communication framework are broadly evolving along the lines observed elsewhere, with remaining exceptions mostly a result of China's unique institutional arrangements. Fourth, our empirical analysis of monetary policy transmission points to both similarities and differences: while policy rates now have a larger effect than monetary aggregates on output and bond yields, reflecting a Chinese financial system that is becoming more developed (as in advanced economies in the 1970s–1980s), the similar average inflation outcomes observed in China and advanced economies have been generated through different means. In sum, our analysis suggests that while some aspects of monetary policy in China are beginning to resemble those observed in advanced economies, convergence is neither likely nor even desired by the authorities given China's institutional configuration and preferred model of economic development. |
| Keywords: | China; monetary policy; financial markets |
| JEL: | E02 E42 E52 E58 E63 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:rba:rbardp:rdp2019-11&r=all |
| By: | International Monetary Fund |
| Abstract: | After a deep economic crisis caused by a difficult external environment, an armed conflict in the East, and delays in the implementation of structural reforms, Ukraine has been showing some signs of recovery. To achieve a more sustainable fiscal consolidation, the Ukrainian authorities have recently adopted a broad Public Financial Management (PFM) System Reform Strategy, paving the way to decisive action in critical areas including medium-term budgeting, analysis and management of fiscal risks, and public investment management (PIM). |
| Date: | 2019–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:19/355&r=all |
| By: | Dautović, Ernest; Hau, Harald; Huang, Yi |
| Abstract: | The paper evaluates the impact of the Chinese minimum wage policy on consumption of low-wage households for the period 2002-2009. Using a representative household panel, we find that the consumption response to minimum wage income shock is increasing in the minimum wage share of household income and that poorer households fully consume their additional income. The large marginal propensity to consume is driven by households with at least one child, while childless poor households save two thirds of a minimum wage hike. The expenditure increase is concentrated in health care and education with potentially long-lasting benefits to household welfare. JEL Classification: E24, J38, C26 |
| Keywords: | household consumption, labor income, minimum wages, transfer income |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20192333&r=all |
| By: | Juan Carlos Cuestas (Department of Economics, Universitat Jaume I, Castellón, Spain); Mercedes Monfort (Department of Economics, Universitat Jaume I, Castellón, Spain); Javier Ordoñez (Department of Economics, Universitat Jaume I, Castellón, Spain) |
| Abstract: | In this paper we analyse the evolution of the RER and its main fundamentals for a group of Central and Eastern European countries. We focus particularly on the possibility of structural breaks in the relationship. We find clear evidence of breaks, mainly caused by the great recession. We find that a combination of both supply-side and demand-side effects are behind the variations in the real exchange rate, and overall, capital inflows have contributed to improve competitiveness in these countries. |
| Keywords: | Real exchange rates; Central and Eastern Europe; structural breaks; European integration. |
| JEL: | C22 F15 F32 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2019/12&r=all |
| By: | Fang, Lei (Federal Reserve Bank of Atlanta); Herrendorf, Berthold (Arizona State University) |
| Abstract: | We document that the employment share of high-skill-intensive services is much lower in China than in countries with similar gross domestic product (GDP) per capita. We build a model of structural change with goods and low- and high-skill-intensive services to account for this observation. We find that large distortions limit the size of high-skill-intensive services in China. If they were removed, both high-skill-intensive services and GDP per capita would increase considerably. We document a strong presence of state-owned enterprises in high-skill-intensive services and argue that this presence leads to important distortions. |
| Keywords: | mortgage default; foreclosure; externality; policy; vacancy |
| JEL: | O41 O47 O51 |
| Date: | 2019–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2019-21&r=all |
| By: | Slavinskaite, Neringa; Liucvaitiene, Ausra |
| Abstract: | Fiscal decentralization phenomenon is highly discussed at various levels and aspects, and the Organization for Economic Co-operation and Development (Eng. Organization for Economic Cooperation and Development, hereinafter - the OECD) gives it an extreme attention as well as the World Bank. Fiscal decentralization has become an interesting topic until today because researchers about fiscal decentralization are not only considered from the economic perspective, but also from other perspectives such as politic, geographic, other subjects. The articleobject – localgovernmentrevenueautonomyofBalticcountries. The aim of this article is to analyse the theoretical aspect of fiscal decentralization, calculate the index of revenue autonomy in Baltic countries. Three Baltic States similar in their area, number of inhabitants, and governmental peculiarities have been chosen for the analysis. This paper compares the three Baltic countries that formally became independent from the Soviet Union in September 1991: Estonia, Latvia and Lithuania. The research methods employed in preparation of this article are theoretical methods of analysis of scientific literature and sources, SAW method for index, comparative and logical analysis and generalisation. The lowest revenue autonomy index of local government of Baltic countries has Lithuania (0.27), the highest – Latvia (0.49).If the revenue autonomy index is near 1, it is mean that local government has a big power to control own revenue |
| Keywords: | International Development |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:icfae3:296785&r=all |
| By: | Ekaterina Maklasova (National Research University Higher School of Economics); Alexander Tatarko (National Research University Higher School of Economics) |
| Abstract: | This study investigates the role of the climato-economic characteristics of 85 Russian regions in the formation of collectivism in those territories. Based on the results of previous research, the authors suggested that in regions with harsh climatic conditions, the richer population has a lower level of collectivism, whereas the poorer population has a higher level of collectivism. For testing these theoretical assumptions, we prepared a dataset with statistical data about each Russian region for the climatic demand (based on the temperature characteristics), monetary resources (the gross regional product (GRP)) and collectivism (the population natural growth, multi-generational households, marriages, divorces, etc.). We used correlation and moderation analyses where regional climate and GRP were the predictors of collectivism. The study demonstrated that these factors predicted the level of collectivism in regions. The study also revealed the moderating role of GRP in the relation between regional climatic conditions and the level of collectivist among the population, which allows the identification of the specific and universal relationships of the indicators. |
| Keywords: | collectivism, climatic demand, climate, GRP, gross regional product, Russia, region |
| JEL: | Z |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:109psy2019&r=all |
| By: | Le, Huong; Ho, Toan Manh (Thanh Tay University Hanoi) |
| Abstract: | This paper examines the macro-economic performance of Vietnam through the six phases of Doi Moi reform and analyzes the impact of external liberalization on economic growth, aggregate demand, employment and income distribution. The decomposition of aggregate demand suggests that private investment was the most important determinant of Vietnamese economic growth during the period of 1994 – 2011, while government expenditure has become more significant since 2005, and the external sector together with government expenditure are the important driving factors of Vietnamese economic growth since 2012. The decomposition of overall labor productivity highlighted the fact that sectoral productivity growth of the service sector plays an important role in the improvement of overall labor productivity in Vietnam. |
| Date: | 2019–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:ctj5z&r=all |
| By: | Fan, Yi (London School of Economics); Yi, Junjian (National University of Singapore); Zhang, Junsen (Chinese University of Hong Kong) |
| Abstract: | This paper documents an increasing intergenerational income persistence in China since economic reforms were introduced in 1979. The intergenerational income elasticity increases from 0.390 for the 1970–1980 birth cohort to 0.442 for the 1981–1988 birth cohort; this increase is more evident among urban and coastal residents than rural and inland residents. We also explore how changes in intergenerational income persistence is correlated with market reforms, economic development, and policy changes. |
| Keywords: | intergenerational income persistence, economic transition, great gatsby curve |
| JEL: | E24 J62 O15 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12804&r=all |
| By: | Chu, Angus C.; Furukawa, Yuichi; Kou, Zonglai; Liu, Xueyue |
| Abstract: | This study explores the heterogeneous effects of minimum wage on innovation of different types of firms. Using firm-level data in China, we find that a higher minimum wage is associated with more innovation by importing firms but less innovation by non-importing firms. To interpret these empirical findings, we develop an open-economy R&D-based growth model and find that a higher minimum wage reduces innovation of firms that use domestic inputs but increases innovation of firms that import foreign inputs. Intuitively, when a higher minimum wage reduces employment, importing firms respond by importing more inputs, which have technology spillovers and enhance their innovation. |
| Keywords: | innovation; minimum wage; imports; knowledge spillovers |
| JEL: | E24 F43 O31 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:97008&r=all |
| By: | Miklós Szanyi (Institute of World Economics, Centre for Economic and Regional Studies) |
| Abstract: | East Central Europe (ECE) has shown marked flaws in its institutional system throughout its transition process compared to Western benchmarks. These were deeper in the Balkan countries than in the Visegrad countries (V4). However from the mid-2000s and especially after the 2008 crisis, also V4 altered institution development path away from the benchmarks. The existing and increasing differences in the political and economic institutions of the ECE versions of the “transatlantic model of capitalism” and the failure of the comprehensive application, moreover the politically and socially easy U-turn in the development process of these countries can be explained with the existence of another local model of capitalism the “Balkan model”. |
| Keywords: | East Central Europe, rent seeking, corruption, capitalist models, business capture |
| JEL: | D72 H82 P16 P31 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iwe:workpr:258&r=all |
| By: | Malkova, Olga (University of Kentucky) |
| Abstract: | This study answers the open question of whether workers respond to financial incentives in a command economy. To do this, I evaluate pension reforms in Soviet Russia in 1964 and 1969 that allowed pensioners to receive a greater share of their pensions if they worked, resulting in a progressive elimination of benefit reduction rates. Variation in group eligibility and variation in benefit reduction rates in eastern and western regions allow for the use of several difference-in-differences frameworks. I collect and digitize novel data from the Soviet archives on pensioner employment, constructing the first database of the Soviet old-age labor market. I find that Soviet pensioners are responsive to financial incentives. By 1969, after the benefit reduction rate fell from an average of 47.8 to 24.1 percent, pensioner employment rates rose by 5.7 percentage points, representing a 47 percent increase. Finally, I provide illustrative estimates of the employment elasticity with respect to the average net-of-tax rate that range from 0.6 to 1.4. |
| Keywords: | pension, retirement, employment, Soviet economy |
| JEL: | J18 J26 H55 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12790&r=all |